Other things equal, the price of a stock put option is positively correlated with which of the following factors?
A) The stock price
B) The time to expiration
C) The stock volatility
D) The exercise price
E) The time to expiration, stock volatility, and exercise price

Question

Quizplus · Accepted Answer

The price of a stock put option increases with more time to expiration, higher stock volatility, and a higher exercise price. More time allows for more potential price movement, higher volatility increases the chances of the option being in-the-money, and a higher exercise price compared to the stock price makes the option more valuable.

Other Things Equal, the Price of a Stock Put Option